HC Deb 26 March 1956 vol 550 cc1932-40

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Godber.]

10.57 p.m.

Mr. John MacLeod (Ross and Cromarty)

I should like, first, to thank you, Mr. Speaker, for giving me this further opportunity of elucidating information from the Joint Under-Secretary of State for Scotland about the policy of the Herring Industry Board in processing surplus herring into meal and oil.

It is, perhaps, unfortunate that so many surplus herring are processed, because this is a very valuable food. It is unfortunate that more herring are not used for human consumption, but it is a fact that large quantities of herring are landed in Ross-shire and that an increasing amount are being processed. This is of special interest to my constituents, as we have no oil or meal factories on the mainland of Ross-shire.

I wish to confine my remarks to two points. One is the recent proposal or scheme for grouping ports into categories A, B and C, and the other is the question of factories and the policy of the Board, with special reference to the village of Avoch and the factory which, at one time, it was proposed to put there. I shall try to be brief, because I know that the Joint Under-Secretary of State wants to reply as fully as possible.

I thank the Minister for the changes which have taken place in the last week from the original proposals. Inverness is now to be upgraded to an A port, which will benefit the fishermen of Avoch who land herring there, while Ullapool and Gairloch are graded as B ports all the year round. The County Council of Ross-shire and the people of Gairloch, and, no doubt, the fishermen who land their fish there from the East Coast, will be disappointed that those places have not been upgraded to A ports and Kessoch has not been at least upgraded to a B port.

The West Coast fishermen played a very important part during the war when large quantities of herring were landed there. That tradition has been maintained. I have no time to discuss all the factors, but will take Ullapool as an example. The Government are spending quite a considerable amount of money there in extending the piers to deal with the large increases in herring. During the last few years fishermen have got into the habit of tying their boats up there during the week-end to enable them to get home by bus to the East Coast. It has been very convenient for them to do so.

For that reason the fishermen will land their herring at the end of the week at those ports, no matter on what principle the present scheme is based. It has been proved that these are the natural ports for them to land at. A large percentage of the raw materials used in the factories on the East Coast is still landed at the West Coast ports. Has the Minister really considered the effect on the small villages if the fishermen are to be bribed, as they are by the Herring Industry Board, to go to other ports at which they do not want to land? I ask the Minister to reconsider the decisions that have been come to.

This leads me to the question of factories for oil and meal. What is the policy of the Board regarding them, and particularly of the factory at Avoch? How great are the, powers of the Board? It has a virtual monopoly of all the surplus of industrial herring landed, over and above that which is used by the home market. It has the extraordinary power of being able to close ports without notice at all, as happened during the past year.

Was there ever such a performance as that enacted by the Board over this factory? I would ask how far the Secretary of State for Scotland is prepared to influence the policy of the Board with a view to a factory being established in this Development Area. It is an area to which we are anxious to attract industry, and particularly industries which will make use of the raw material, namely, the local-caught herring. Avoch is well situated to deal with the herring landed on the East and West Coasts. There is at present a fleet of 21 boats manned by young, energetic fishermen. At their doors this rich harvest of Kessock herring. I believe that over 70,000 crans have been landed in the last six months.

Surely these men ought to be given every encouragement to develop their own port. What happened? The Secretary of State, and especially the Under-Secretary, know the story. Therefore, I will only mention one or two of the principal reasons why this case ought to be further investigated. The Secretary of State will recall that a private firm in Hull, which had had vast experience, was prepared to establish a factory in the area. The firm agreed in principle, I believe, with the Herring Industry Board; but a number of details were not agreed. What finally dissuaded the firm was that the Board stipulated that the firm must put up a factory which the firm considered was an uneconomic unit. I would ask the Under-Secretary what the Board considers to be an economic unit. Does it consider that there should be small factories at various ports, or one larger factory to deal with the products of various ports?

The Board's policy now appears to be to enlarge the present factories. It seems that it has changed its ideas since the period when it virtually drove out the private firm which proposed to establish a factory. The Board then decided to proceed with a factory. Now the Ross-shire County Council is accusing the Board of breach of faith because of a promise it made in a letter which I will read. The letter, dated 26th May, 1954, stated: In reply to your letter of the 19th May, I can give the Board's assurance that if the County Council provide a suitable pier and approach road to Avoch, the Board will establish their reduction factory there. The County Council, at some expense, got a promise of a grant from the Treasury. Surely the Treasury does not make such promises without going thoroughly into a question. Avoch must have had a strong case for such a promise to be made.

The Board refused to go ahead with this because of objections from Fortrose, which was three miles away across the water from the proposed site. The Board had every right to object, but does the Under-Secretary believe that they had grounds for so doing? It still remains a complete mystery to me, a mystery which should be cleared up, because the Board could have had a public inquiry if it had asked for planning consent. I should like briefly to read one more letter from the Planning Consultant, Ross-shire: If we can get from the Herring Industry Board application for planning permission in principle for the use of the plant for fish meal factory we could inform the Fortrose Town Clerk we intended to grant planning consent and invite them to ask the Secretary of State to call in the application and decide himself as, of course, he has power to do under the Planning Act. The Secretary of State, in a matter of such public interest, I am assured, would be unlikely to give any decision without holding a public inquiry. Several precedents for such action exist. Why did not the Board do this and instigate a public inquiry as it could have done? Was it because it had, as I believe, changed its policy? I think that it was most unworthy to use Fortrose as the scapegoat.

To sum up, I should like to ask the Under-Secretary whether private enterprise still has a part to play in the policy of the Herring Industry Board. If so, what encouragement is such a firm likely to get and would such a firm get its raw materials at an economic price? I believe that a private firm would still come to Avoch if conditions were made attractive enough and it is within the power of the Board and the Secretary of State to make them attractive. Farmers in the region would help to finance this, because they are anxious to have a compound factory which could run in conjunction with the meal factory and which would make both very much more economical to run.

I should like to ask the Under-Secretary what assistance the Board would give and what help the Secretary of State for Scotland is prepared to give to implement the assurances that were given, when this area was scheduled as a Development Area, to encourage industry to come into the area, that this pier would be built if the factory came there. I believe that that would lead to further development and encouragement to industry in the area.

11.8 p.m.

The Joint Under-Secretary of State for Scotland (Mr. J. Henderson Stewart)

I am very glad to have the opportunity which my hon. Friend the Member for Ross and Cromarty (Mr. John MacLeod) has afforded us to discuss the plans of the Herring Industry Board. I entirely understand his anxiety for his constituents and his desire to obtain the best possible conditions for his fishermen. That is a perfectly laudable desire. On the other hand, he will appreciate that the Board and the Government have a responsibility over the whole country and necessarily have to take a wider view.

What we must try to do by any reorganisation scheme we have is to get the oil and meal department of the Board standing on its own feet as soon as possible and, at the same time, bring about the greatest good for the greatest number of fishermen. The Board has tried and is trying to meet that objective as far as possible in all that it has done. As my hon. Friend knows, certain amendments of the proposals which have been recently announced illustrate the Government's and the Board's readiness to listen to representations.

We are concerned mainly with the herring used for oil and meal. This is a comparatively new development in the industry, and started only eight years ago. Its purpose was to encourage fishermen to pursue their trade, to go out and fish, so that there would always be sufficient supplies available to meet consumer demands. The encouragement provided by the new scheme took the form of a guaranteed market for whatever was left over after the home and export markets for herring had been met and satisfied. The surplus was bought by the Board at certain fixed prices, and converted into oil and meal which it subsequently sold on the open market for the best price it could get.

When the scheme started there were few conversion factories in existence at any herring port. There was one fairly large factory operating at Fraserburgh, but that was the only one in Scotland, or in any part of the country. There were others at Hull and a few English ports, primarily for white fish. The cost of transporting herring to these ports, mostly in England or distant parts of the country, like the North-West of Scotland, was exceedingly heavy, and it was mainly this factor which caused the considerable losses on the scheme in the early stages, and which still account, though on a diminishing scale, for the substantial Treasury subsidy which is required by the Board for this side of its work.

Since 1948, that subsidy has amounted to no less than £2,500,000 for this scheme alone. Last year it amounted to £125,000 and this coming year it is estimated to cost probably about £80,000. But this herring oil and meal scheme has caught on with the fishermen. It is here to stay—I do not think there is any doubt about that—and that being so, it should clearly become self-supporting as soon as possible. The Government have made it plain that that is their intention and I have never heard any responsible criticism of that view. We are trying our best to act according to that principle.

Two major policies, have, therefore, been pursued. First, the processing investment has been steadily developed in the areas where the catches are highest. The Board has built, with Treasury grants, five new factories at Wick, Peterhead, Stornoway, Peel, and Yarmouth; and there have been extensions at Stornoway and at four private enterprise plants at Fraserburgh, Aberdeen, Falkirk, and Northern Ireland. By these means, conversion plants have been brought nearer to the herring—with consequent saving of long transport hauls.

Under this policy there arises the question of Avoch and Ullapool. It would manifestly have been both convenient and sensible to have established an oil and meal factory at Ullapool. As early as 1950 the Herring Industry Board tried to do so, but the site selected was refused by the county council, and despite the Board's strenuous efforts and wide surveys in the area of the county, no other suitable site could be found. Having failed on the West Coast, the Board then turned the search to the East Coast. Inverness seemed a possible location and had a great deal to commend it.

It would have suited my hon. Friend's constituents very well, but, again, the Town Council would not grant permission. But the Board was still intent on meeting the needs of Highland fishermen, so it next considered Avoch in the Black Isle, where, as my hon. Friend truly said, a small but vigorous fishing fleet now operates. The Avoch site was offered to the Board by the county council, which made it attractive. The offer was keenly pursued by both the Board and, as my hon. Friend has said, a private company.

The Board, as a matter of fact, would have welcomed the intervention of the private company; it did not want particularly to build a factory of its own at all, and for a time there seemed hopes of an arrangement between the Board and the company. But, in the end, the talks broke down. Why? The Board had offered financial assistance to the company by way of a loan for a plant of a capacity of five tons per hour—a fairly big plant; nearly as big as the extension which it is making now in Stornoway. That five tons an hour standard seemed to the Board the maximum which looked like an economic success. The firm, however, wanted a bigger factory, but the Board felt that it could not risk Exchequer money—and it meant a rather big Exchequer sum—on a project which it considered, on the ground of size, to be unsound.

The firm also asked for a guarantee of certain supplies of herring; it wanted certain minimum quantities delivered; but because of the uncertain nature of herring fishing this was something that the Board simply could not do; they could not give that guarantee. My hon. Friend knows as well as I do that supplies of herring for the production of oil and meal are very variable—the history of last summer proves that—and if costs are to be kept to a minimum, supplies must be handled at the nearest available factory. The Board could never, in practice, assure this or any other factory, even its own, a pre-determined quantity. In those circumstances, the firm intimated that it did not wish to proceed, and I was very sorry about it.

Mr. John MacLeod

What happens in the four private factories that the Under-Secretary mentioned? Do they get no guarantee of supplies of raw materials?

Mr. Stewart

I am not aware of any undertakings of that kind, but I will inquire into that point and write to my hon. Friend.

The Board, negotiations having broken down, then began to work out plans for itself to build a factory at Avoch, so keen was it on the the position. The Board made strong representations in its favour to the Government, and we responded readily and generously to them. We not only accepted the proposal to meet the whole cost of the new factory—£70,000— but we also promised a grant of £35,000 to the county council for the construction of a new pier to make the factory workable: a total Government subvention of over £100,000, which would have been the biggest single expenditure on any similar factory in any part of the country.

My hon. Friend must, therefore, see that we were utterly in favour of the Avoch project and, as I say, there was every intention to go ahead, when suddenly, out of the blue, came a protest from the town council of the nearby borough, Fortrose, that the smell from the proposed factory would adversely affect the amenities of that very attractive summer resort. The Board met representatives of the council in an effort to allay their objections; it did its very best, but was unsuccessful.

Here was a new situation. I have no doubt that the Herring Board could have obtained planning consent from the county council. My hon. Friend says that it could do it now. I do not deny that. But even if it did—and this is the answer to his query about a public inquiry—even if they did get planning consent from the county council, it would still have been open to any person, claiming that the Board's operations in the factory were a nuisance to owners or occupiers of property in the neighbourhood, to raise an action of interdict against the Board. That is undoubtedly the legal position.

The Board intended, of course, to use the most modern methods and techniques, and it would have had no doubt about its ability to survive any such action in an established fishing port already pervaded with fishing odours, but it felt that there was considerable element of risk in proceeding with a factory in a relatively undeveloped area like Fortrose, where there was a definite indication of material opposition to it.

Mr. John MacLeod

Surely, if a public inquiry had been held—and it could still be held—these points would have been brought out. I should like to find out what is the strength of the opposition.

Mr. Stewart

There is no doubt that they would have been brought out. But, had an inquiry been held and consent given, it would still have been open to any person to bring an interdict against the Board.

The Board felt that there was a considerable element of risk in proceeding with a factory in an area where there was likely to be material opposition. It considered that the risk was too great to hazard the breaking of a vital link in its programme and the spending of such a large sum of money; so, with regret, it informed the county council that it did not intend to proceed.

I wish now to turn to the second leg in the policy. The first was to bring factories nearer to the fish. The second was to bring delivery of landings of fish nearer to the factories; in other words, by adjustment of prices offered and designation of ports of landing for surplus fish purchased for oil and meal, to induce fishermen to bring their catches to the most convenient places.

I need not go through the details of the new scheme, which was circulated to the trade last month, and which has now been adjusted to take account so far as possible of points raised by the fishermen's associations. I shall be glad to show the letter to my hon. Friend or to any other hon. Member who wishes to see it. In short, the fishing ports are divided into three groups, A, B and C. This general plan was adopted mainly to reduce the cost of transporting herring from port to factory so that a further step could be taken towards the goal of making the scheme self-supporting. Incidentally, to the extent that fishermen fall in with the plan, their prices will be better. But we have gone further than that. The strict application of the principles introduced in the plan has been tempered in certain cases in order to secure that there is a class A port reasonably available to fishermen in every main fishing area.

The Question having been proposed after Ten o'clock and the debate having continued for half an hour, Mr. SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at twenty-seven minutes past Eleven o'clock.